Akron ethanol plant postponed

The developers of a 100-million gallon ethanol plant south of Akron announced Wednesday that they are delaying their project.

Steve Roe, General Manager of Little Sioux Corn Processors of Marcus, said he didn't want to put a time on the delay.

According to a press release, the developer Akron Riverview Corn Processors, a subsidiary of Little Sioux Corn Processors, is suspending project development and preparation of the registration statement for the sale of its securities at this time due to market conditions.

They plan to "monitor market conditions and will proceed with the preparation of its registration statement and further project development at a later date if it deems it appropriate and advantageous."

"It's really an economic issue," said county economic development director Gary Tucker. "Low ethanol prices and high corn prices are making it very difficult to create financial projections that banks are interested in financing."

General Manager Roe said the equity drive has not yet been started.

"We are getting relatively close on the filing of securities," he said.

Tucker said the announcement came as somewhat of a surprise.

"It's an extremely disappointing and frustrating situation, to spend all the time, energy and effort to get as far as we have, then have this" Tucker said. "But Steve Roe and Little Sioux have put a tremendous amount of effort and investment into this project, and it isn't like they enjoy making this decision, but it's a business decision."

The delay will mean holding up the roadwork planned for re-routing Highway 3 south of Akron and updating intersections near the plant.

"I think we're looking at continuing on to a point where we can hold up until we verify the schedule next year," said county engineer Tom Rohe. "We are so far along in the preliminary planning process that we'll bring that to completion so we could move forward quickly if we needed to."

They'll likely finish up the plans for grading this year, he said, but hold up on the process of purchasing right of way from landowners for now.

Rohe will also meet with the roadwork engineers, HGM Associates, to work out their plan of action.

He said he didn't yet have an estimate of how much the county has spent on developing roadwork plans for that area yet.

"I imagine there will probably be a discussion with the county board of supervisors next Tuesday about where to go with this project now, and I'll have those figures then," Rohe said.

Progress on the Urban Renewal Area (URA) proposed south of Akron to include both the ethanol and the biodiesel plant planned one mile south of it will also be delayed. The URA would help the county capture any increase in taxes from that specific area to use for improvements like roadwork.

"If the biodiesel plant moves forward we will at that time move forward with the urban renewal area," Tucker said. "We'd use the same boundaries and include the area where the ethanol plant is planned. Until then, there's no reason to move forward."

The two public hearings scheduled to discuss the Akron URA have been postponed until further notice.

For now, Tucker said, the county will focus on the Urban Renewal Area planned around the 50-million gallon Merrill ethanol plant, which is slated to be built by early 2008.

"This doesn't diminish the workload, it just shifts it," Tucker said.